US GDP Growth Revised Up to 3.2% in Q3


The US economy advanced an annualized 3.2 percent on quarter in the three months to September of 2016, up from 1.4 percent growth in the previous period and better than a 2.9 percent expansion in the advance estimate. It is the highest growth rate in two years, as consumer spending, exports and investment in structures rose faster than anticipated while fixed investment fell more, according to the second estimate released by the Bureau of Economic Analysis.

Personal consumption expenditure (PCE) contributed 1.89 percentage points to growth (1.47 percent in the advance estimate) and rose 2.8 percent (2.1 percent in the advance estimate). Spending on both durable goods (11.6 percent compared to 9.5 percent in the advance period) and services (2.5 percent compared to 2.1 percent in the advance estimate) increased faster than anticipated and spending on nondurable goods fell less (-0.6 percent compared to -1.4 percent in the advance estimate). 

Fixed investment subtracted 0.15 percentage points from the growth (-0.09 percent in the advance estimate) and shrank 0.9 percent (-0.6 percent in the advance estimate). Investment in equipment fell for the fourth straight quarter at a faster 4.8 percent (-2.7 percent in the advance estimate) and investment for intellectual property products increased at a slower 1 percent (4 percent in the advance estimate). In contrast, residential declined less than anticipated 4.4 percent (-6.2 percent in the advance estimate) and investment in structures grew faster (10.1 percent compared to 5.4 percent in the advance estimate).

Private inventories added 0.49 percentage points to growth (0.61 percentage points in the advance estimate), the first positive contribution since the first quarter of 2015. Businesses accumulated $7.6 billion worth of inventory, lower than $12.6 billion in the advance estimate. 

Meanwhile, exports increased 10.1 percent (10 percent in the advance estimate), the biggest gain since the last quarter of 2013. Imports rose at a slightly slower 2.1 percent (2.3 percent in the advance estimate), bringing the impact from trade up to 0.87 percent (0.83 percent in the advance estimate).

Government spending and investment added 0.05 percentage points to growth (0.09 percent in the advance estimate) and rose at a slower 0.2 percent (0.5 percent in the advance estimate).

BEA | Joana Taborda | joana.taborda@tradingeconomics.com
11/29/2016 2:01:28 PM